Tuesday, 7 April 2020

Icelandair latest figures show depressing drops in passengers and revenue as it asks banks and the government for help

In March 2020, the operations of Icelandair Group were heavily impacted by the coronavirus  COVID-19 pandemic, the subsequent travel restrictions around the world and decreased demand for international and domestic travel, charter flights as well as hotel services have been deeply felt by the group.

As other airlines have seen cargo operations increase, Icelandair has seen its services decrease as a pandemic grew.  The company expects that the flight schedule for the summer period will be reduced by at least 25% but it is still uncertain when the demand for travelling will start to increase again. It has therefore asked Icelandic banks and the government for help in the process of strengthening the long-term capital structure of the Company.

The latest figures from the airline indicate the total number of Icelandair’s passengers was 122,623 a decrease of 54% on last years result. The number of passengers to Iceland was around 67 thousand compared with 121 thousand in March 2019, decreasing by 44%. The number of passengers on the home market from Iceland decreased by 48% and the number of via passengers decreased by 68% compared with March 2019. The load factor on Icelandair’s flights was 61.9% compared to 81.2% in February 2019. The total capacity was 44% less than in March last year. On-time performance was 93.0% in March 2020 compared with 77.3% in March 2019.


The number of passengers on domestic and regional flights was around 11 thousand in March 2020, decreasing by 51% from the year before.  The capacity measured in available seat kilometres was down by 42%. The load factor was 56.6% compared with 68.0% the year before.

The number of sold block hours in charter flights decreased by 38%. When measured in Freight Tonne Kilometres, freight decreased by 21%. The number of sold room nights at Icelandair Hotels decreased by 50% from 2019, with room occupancy at 43.0% compared to 77.8% in March 2019.




INTERNATIONAL FLIGHTSMAR 20CHG (%)YTD 20CHG (%)
  To market (passengers)67,271-44%300,819-3%
  From market (passengers)22,078-48%100,081-13%
  Via market (passengers)33,274-68%157,615-43%
Total Number of Passengers122,623-54%558,515-21%
Load Factor61.9%-19.3 ppt71.4%-4.9 ppt
Available Seat KM (ASK´000,000)589.2-44%2,295.8-21%
Revenue Passenger KM (RPK´000,000)364.5-58%1,640.3-26%
Stage length (KM)2,969-6%2,952-5%
On-Time-Performance (Arrivals)93.0%15.7 ppt81.0%2.1 ppt
DOMESTIC AND REGIONAL FLIGHTSMAR 20CHG (%)YTD 20CHG (%)
Number of Passengers11,185-51%45,224-27%
Load Factor56.6%-11.4 ppt66.5%2.9 ppt
Available Seat KM (ASK´000,000)6.5-42%21.8-29%
CHARTER FLIGHTSMAR 20CHG (%)YTD 20CHG (%)
Fleet Utilisation100.0%9.1 ppt100.0%8.8 ppt
Sold Block Hours1,585-38%7,058-6%
CARGOMAR 20CHG (%)YTD 20CHG (%)
Freight Tonne KM (FTK´000)9,485-21%30,082-7%
HOTELSMAR 20CHG (%)YTD 20CHG (%)
Available Hotel Room Nights30,050-9%95,4730%
Sold Hotel Room Nights12,926-50%58,399-17%
Occupancy of Hotel Rooms43.0%-34.8 ppt61.2%-12.5 ppt




Because of the significant drop in demand for international air travel, Icelandair's management has been focused on continuing to keep vital air routes open to passengers and cargo, both to Europe and North America although its flight schedule has been reduced to less than 10% of the proposed schedule for this period of the year.

The Company expects that the flight schedule for the summer period will be reduced by at least 25% but it is still uncertain when the demand for travelling will start to increase again. The liquidity position of the Company is still well above its USD 200 million minimum levels, according to its internal liquidity management policy and, as previously announced, the Company has already taken significant steps to minimize the impact on cash flow in the past few weeks. However, assuming minimum revenue generation in April and May, the Company expects a decrease of its liquidity which would result in a liquidity position under its above-mentioned USD 200 million minimum level. Therefore, the Company intends to assess options to strengthen its financial position further for the long-term in the upcoming weeks.

Icelandair Group has now engaged Kvika banki, Íslandsbanki and Landsbankinn as advisors to initiate the process of strengthening the long-term capital structure of the Company. The objective is to explore all possibilities to strengthen the Company’s competitiveness for the future by having a stronger financial position and lower unit cost when recovering from the COVID-19 pandemic. This will ensure that Icelandair Group will get through these difficult times as smoothly as possible and minimize disruption to the Icelandic tourism industry and economy, as well as being in a stronger position to react quickly when opportunities will arise again. The Company will also work closely with the Icelandic Government in the upcoming process.




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